Wednesday, September 15, 2010

A Saturday morning totally well-spent - Startup Saturday Bangalore on “Social Entrepreneurship”

Originally posted at the HeadStart! Network blog.

Many of us entrepreneurs and aspiring entrepreneurs have frequently thought about how we can make a difference to the society we live in while at the same time improving our lifestyle through a profitable business. While admittedly all businesses are social in the sense that they create opportunities for employment, improves stakeholder livelihoods, and engages with the community, Social Entrepreneurs are different because their primary motive is social change coupled with income generation. But is that possible? Can we create a positive social impact and drive change while still pursuing the entrepreneurial dream? But how?

To answer these questions and more, and to move us all one step closer to our socio-entrepreneurial dreams, we had based this month’s Startup Saturday in Bangalore on the theme “Social Entrepreneurship”. The session started with our first speaker of the day, Mr. Vikram Rai, Co-Founder & CEO of Sattva Media and Consulting ( elaborating on the What, Why and How of Social Entrepreneurship.

Till a few years back, social development was predominantly perceived as the focus area of the Government, Civil Society Organizations and NGOs. Today it is no more so. Everyone can contribute to the community’s development may it be individuals, associations, companies, non-profits, NGOs or the Government. This has created an enormous amount of interest and a new breed of entrepreneurs has evolved who are keenly interested in creating a social impact.

While both entrepreneurs and Social entrepreneurs are primarily bothered with solving problems to generate the company’s revenue, the latter’s problems are larger and his/her solutions to them are more benefiting the society. They are as equally worried about revenue channels as they are about measuring social impact. They use new ways and models to solve social problems, or new ways and models to do business which also has significant social impact.

Vikram wrapped up his session with a final thought: Whatever model of business Social entrepreneurs follow, they would need to understand that unlike other businesses, they will need to invest far more time to see a substantial return on their investment - the social benefits and change driven by a profitable business.

Our next speaker was Ms.Sonali Singh of Start Up! ( who spoke about the support systems available for social entrepreneurs in India through her experiences at Start Up!, an angel investor for social entrepreneurs. She shared examples of two social enterprise startups they have advised and funded to scale to a business model from just a social idea.

She also spoke about how unlike other businesses social enterprises need investors who can stay involved for a very long time. This industry needs a new breed of investors (social investors) who will be more concerned about social change than just the monetary ROI. There is also, perhaps not so surprising, a lack of seed funds in the industry. This will change as the industry matures and we discover concrete ways in which to measure social change but till then social entrepreneurs might have to grow to a certain stage through their own funds before approaching VCs and other fund houses.

The final session of the day was the case study of a successful social enterprise. Ms. Neelam Chhiber, Co-founder of IndusTree Craft Foundation and Managing Director of Mother Earth ( shared her experiences and thoughts on founding and growing IndusTree. The IndusTree story is well-known and case studies of their successful growth to a profitable retail chain that connects rural producers to urban markets are available online. But more than these detailed case studies, Neelam’s experience sharing in the 45-odd minutes she spoke was extra-ordinarily insightful and thought-provoking.

The craft industry in India has been ignored for long and it has even been dubbed as a ‘sun-set’ industry. What everyone will be surprised to hear though is that this is the very industry that supplied everything a household needed before the industrialization and china imports hit India. This industry does not just produce the knick-knacks that you see in exhibitions and bazaars but also high-utility items. Many of us don’t realize this and crafts have been reduced to ‘cultural’ items of desire and not recognized as a source of income for more than 40 million people in the country. IndusTree and Mother Earth was started to take away this notion and bring to the masses indigenously produced goods - covering all three essentials Roti Kapda aur Makaan - and to establish a stable market and a better livelihood for the rural producers.

The biggest problem in the craft sector is working capital, and the mismatch between demand and supply. One of the ways in which IndusTree has been able to address this is through providing working loans to artisans (through Rang De) to help them produce goods, and assuring them of a market for these goods through a dedicated retail chain called Mother Earth.  The other problem that plagues this industry is the amount of margin that is taken away from the producer’s share through middle men, distribution channels, and the retail outlet - a problem of supply chain. IndusTree has addressed this by giving these producers a share in the retail outlet (the brand) and not just the supply company. This basically enables more profit to flow into producers and also strengthens their commitment to the retail outlet’s success.

Neelam was also very vocal in her thoughts on calling these rural producers ‘artisans’ - she says these are goods that give them a decent livelihood, and they cannot be just reduced to culture and history. Supporting this industry is as much about enabling a sustainable livelihood as it is about buying affordable Indian utility goods not to mention supporting the most green and eco-friendly production process around.

Neelam concluded by narrating an incident from one of her stores on a mystery-shopper’s complaint of a ‘too-lowly priced” brass figurine. Unlike popular notion, she says, craft need not be exorbitantly priced to prove its authenticity and that pricing it high will not necessarily fetch the income that artisans require to lead a decent life.

...More at the HeadStart blog.

1 comment:

Vinod Narayan said...

I wish I saw this blog earlier, I was in India during this time and in B'lore as well, would have loved to attend. Thanks for sharing it, Do put an article on some ways for people to involve in Social entrepreneurship ventures in India